So Vivek Shah has emerged from his post-Time Inc. (NYSE: TWX) stage as the new owner of tech publisher Ziff Davis, including PCMag.com, with Boston-based Great Hill Partners providing the funding. Technically, what they’ve picked up are the assets of a company that was saddled with debt from high leverage, and even after emerging from bankruptcy, still had too much debt. “This was a company with a good income statement and a bad balance sheet,” Shah told paidContent in an interview. With those problems solved, he can invest in coverage, content and distribution.
Why does he want it? It’s a top-tier brand with a valuable in-market audience that has already made the difficult — and, Shah says, prescient — decision to get out of the legacy business. Among other pluses: existing advertising is strong and the company already has 72,000 digital subs primarily through Zinio, suggesting that iPad and coming tablets should be good opportunities. Shah plans to add database marketing to that mix. “There’s a huge data opportunity. You take the audience that this company has and you recognize that that audience can be made available to marketers across lots of other sites, lots of other platforms.”
The partners plan more acquisitions in the tech vertical and will consider other verticals, possibly finance and health, but Shah says the emphasis now will be on investing in Ziff Davis. “There is far more money available for this new company we’re creating than what we have put forward for this deal.” He wouldn’t disclose the amount; my understanding from talking to others involved is that the equity holds are getting what amounts to a recovery fee but won’t be whole.
June 4 memo from Vivek Shah:
I wanted to share the attached press release we